Tax And Regulatory - Sample Questions

1. Capital Gains arises from the transfer of:

Any asset

Any capital asset

Land only

All assets other than land

Capital gains arise from the transfer of any capital asset. This means that when a capital asset such as stocks, bonds, real estate, or other investments is sold or transferred, any profit or gain made from that transfer is considered a capital gain. It is important to note that not all assets are considered capital assets, and only the transfer of capital assets can result in capital gains.

Explanation

Capital gains arise from the transfer of any capital asset. This means that when a capital asset such as stocks, bonds, real estate, or other investments is sold or transferred, any profit or gain made from that transfer is considered a capital gain. It is important to note that not all assets are considered capital assets, and only the transfer of capital assets can result in capital gains.

2. When does the liability to pay Excise duty arises?

At the time of removal of goods from the factory

At the time of manufacture of goods

At the time of receipt of payment from the customer

At the time of entry in the books of account

The liability to pay Excise duty arises at the time of removal of goods from the factory. This means that the duty must be paid when the goods are physically taken out of the factory premises. It does not depend on the time of manufacture of goods, receipt of payment from the customer, or entry in the books of account.

Explanation

The liability to pay Excise duty arises at the time of removal of goods from the factory. This means that the duty must be paid when the goods are physically taken out of the factory premises. It does not depend on the time of manufacture of goods, receipt of payment from the customer, or entry in the books of account.

3. A company is required to pay 75% of its advance tax liability by which date:

15 March of the previous year

15 December of the previous year

15 September of the previous year

15 June of the previous year

The correct answer is 15 December of the previous year. This is because companies are required to pay 75% of their advance tax liability by this date as per tax regulations. Advance tax is paid in installments throughout the year to avoid a large tax burden at the end. By paying 75% of the liability by December, companies can ensure they meet their tax obligations and avoid penalties.

Explanation

The correct answer is 15 December of the previous year. This is because companies are required to pay 75% of their advance tax liability by this date as per tax regulations. Advance tax is paid in installments throughout the year to avoid a large tax burden at the end. By paying 75% of the liability by December, companies can ensure they meet their tax obligations and avoid penalties.

4. Additional depreciation under Section 32(1)(iia) of the Income-tax Act,1961 is available to:

Plant & Machinery only

Plant & Machinery and Buildings

Plant & Machinery and intangible assets

All depreciable assets under the Income-tax Act, 1961

Additional depreciation under Section 32(1)(iia) of the Income-tax Act,1961 is available only to Plant & Machinery. This means that businesses can claim an additional depreciation deduction for the cost of acquiring new plant and machinery assets. This deduction is over and above the normal depreciation deduction allowed under the Income-tax Act, 1961. It is not available for buildings or intangible assets.

Explanation

Additional depreciation under Section 32(1)(iia) of the Income-tax Act,1961 is available only to Plant & Machinery. This means that businesses can claim an additional depreciation deduction for the cost of acquiring new plant and machinery assets. This deduction is over and above the normal depreciation deduction allowed under the Income-tax Act, 1961. It is not available for buildings or intangible assets.

5. In the hands of the transferor, the transfer of capital asset by way of gift is:

Taxable as income from Capital Gains

Taxable as income from Other Sources

Wholly exempt

Exempt subject to certain conditions

The transfer of a capital asset by way of gift is wholly exempt from tax. This means that the person who is transferring the asset does not have to pay any taxes on the transaction. This exemption applies regardless of the value of the asset or any other conditions.

Explanation

The transfer of a capital asset by way of gift is wholly exempt from tax. This means that the person who is transferring the asset does not have to pay any taxes on the transaction. This exemption applies regardless of the value of the asset or any other conditions.

6. If an assessee is rendering both taxable services as well as exempted services, what percent of exempted services can an assessee opt to pay, if separate books of accounts are not maintained?

8 percent

10 percent

6 percent

5 percent

If an assessee is rendering both taxable services and exempted services without maintaining separate books of accounts, they can opt to pay 5 percent of the value of exempted services. This means that only 5 percent of the revenue generated from the exempted services will be subject to tax, while the remaining 95 percent will be exempted from taxation.

Explanation

If an assessee is rendering both taxable services and exempted services without maintaining separate books of accounts, they can opt to pay 5 percent of the value of exempted services. This means that only 5 percent of the revenue generated from the exempted services will be subject to tax, while the remaining 95 percent will be exempted from taxation.

7. Scripts of which of the following schemes can be purchased in the open market and be used to discharge Customs duty?

Served from India Scheme

Export Promotion Capital Goods Scheme

Advance authorization

Focus Market Scheme

The Focus Market Scheme allows exporters to purchase scripts in the open market, which can then be used to discharge Customs duty. This scheme aims to promote exports to specific markets and provides incentives to exporters. By allowing the purchase of scripts in the open market, it offers flexibility and ease of use for exporters to meet their Customs duty obligations.

Explanation

The Focus Market Scheme allows exporters to purchase scripts in the open market, which can then be used to discharge Customs duty. This scheme aims to promote exports to specific markets and provides incentives to exporters. By allowing the purchase of scripts in the open market, it offers flexibility and ease of use for exporters to meet their Customs duty obligations.

8. Deduction of profit and gains derived from export under section 10AA available to SEZ units is for __________ years.

10

5

8

None of these

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Explanation

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